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A.G. Forces Veranda To Pay $150,000 For Wage Underpayments And $50,000 For Retaliation Against Employee Whistleblowers

Schneiderman: My Office Will Aggressively Pursue Employers Who Fire Workers For Standing Up For Their Rights

NEW YORK – Attorney General Eric T. Schneiderman today announced the resolution of an investigation of Veranda, a restaurant and lounge in Manhattan that underpaid approximately 25 workers and terminated two employees who questioned the company’s illegal pay practices. As part of the settlement with the Attorney General, Veranda will pay $150,000 in restitution for employees who were paid below the minimum wage and did not receive overtime pay as required by law, in addition to $50,000 in restitution for damages, lost wages, and penalties for wrongfully terminating the other two workers.

“By scaring employees into silence, employer retaliation undermines basic labor law protections. Now Veranda will be held accountable for violating the laws that protect our state’s most vulnerable workers,” said Attorney General Schneiderman. “My office will aggressively pursue employers who fire workers for standing up for their rights -- especially during tough economic times, when so many workers are already afraid of losing their jobs.”

New York State's minimum wage is $7.25 per hour, and under the state's overtime requirement, employers must pay workers 1 ½ times their regular rate of pay for each hour they work past 40 in a given week. When certain conditions are precisely met, employers may pay a tipped employee a slightly lower hourly wage rate. However, managers and others who do not serve the public may not take a portion of tips received.

It is illegal for employers to retaliate against workers who report violations of labor law. The Wage Theft Prevention Act, effective in April of last year, created additional remedies for workers who have experienced retaliation, including liquidated damages of up to $10,000 per instance of retaliation. A significant portion of the settlement attributable to retaliation is based on new remedies available only under the new law.

The investigation revealed that Veranda failed to pay many employees the minimum wage and overtime, and that Veranda illegally distributed tips to the manager. It also showed that Veranda fired two employees shortly after they participated in a group complaint, made to Make the Road New York, about the company's illegal pay practices.

The settlement bars Veranda, located at 130 7th Avenue in Greenwich Village, from retaliating against employees perceived to have cooperated with the investigation or employees who will be receiving unpaid wages under the settlement. In addition, the restitution amount reimburses employees for tips that were taken by the club manager, in violation of federal and state labor laws. The Attorney General’s office will continue to monitor Veranda's employment practices for the next two years.

Complaints in this case were referred to the Attorney General's Office by the advocacy group Make the Road New York.

One worker, named Marco, said this about the settlement, “When I first heard about a possible victory, I could not believe it. I feel very happy to know that justice has been done. I am thankful to Make the Road New York for fighting to pass the Wage Theft Prevention Act, which is the reason we are seeing the results we want. I also want to thank the Attorney General for working so hard to help me and my co-workers. It means so much to us knowing that there are institutions that will hold employers accountable to obey the law, and this makes it easier for any worker whose rights have been violated to speak up.”

Another worker, named Isidro, said “I never thought Veranda would pay me the wages they owed me and I did not believe they would be held accountable for retaliating against me after I stood up for my rights as a worker. When I received the news that the Attorney General had reached an agreement with my ex-employer, I was so happy, I couldn’t believe it. I want to thank Make the Road New York for defending workers’ rights and for connecting us with the Attorney General’s office. If it hadn’t been for the Attorney General, we would not be celebrating this victory, we are very happy and very grateful.”

Deborah Axt, Co-Executive Director of Make the Road New York, said, “When Veranda employees demanded that their employer obey the law, Veranda tried to cover its tracks by firing the workers who had the courage to complain. This is exactly the kind of law-breaking that Make the Road was working to combat when we helped to pass the Wage Theft Prevention Act. We commend the Attorney General for aggressively investigating this case and for obtaining the maximum penalty and liquidated damages provided by the new Wage Theft Prevention Act for Veranda’s retaliation. The problem of wage theft will not be resolved until employees can freely demand their hard earned pay, and this victory tells workers across the state that Attorney General Eric Schneiderman and the brilliant attorneys in his office will stand with them, using all of the best tools that the law now has to offer.”

The case was handled by Section Chief Andrew J. Elmore, under the supervision of Terri Gerstein, Bureau Chief of the Labor Bureau and Janet Sabel, Executive Deputy Attorney General for Social Justice.

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